Note to Readers: The information provided in this article is a brief summary for information purposes only and is applicable only for the Province of Ontario. It is not intended to be legal advice. Full and complete advice can only be given by a lawyer who has detailed information about your individual circumstances.

THE OFFER TO PURCHASE

Formally the "Agreement of Purchase and Sale", the Offer to Purchaseis a binding legal contract which sets out the rights and obligations of the Purchaser and Seller. It governs when, under what conditions and at what price and on what terms the house will be sold.

Terminating or cancelling the Agreement can result in breach of contract and damages for the expenses and loss of the other party. Do not cancel the transaction without the advice of your lawyer!

We recommend if possible review the Offer with a lawyer before signing it. There may be something that should be added or changed. We will still be pleased to review the Offer and advise of your rights and obligations after it is signed.

HOW TO TAKE TITLE (that is, whose name will be on the title?)

You may take title:

• in one name alone;

• in the joint names of both spouses;

We recommend that couples own their home jointly. They will then be equal owners and there will be considerable cost savings if one spouse dies.

Business or other reasons may require the house to be in one name only; please discuss this with us

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SURVEYS and TITLE INSURANCE

A survey shows the location of the buildings in relation to the property boundaries. It will show any encroachment of the house onto other property, or of other buildings on this property. Zoning set back requirements can be checked. If you buy the property without a survey, you buy any problems that the survey would have disclosed. The rule is caveat emptor: let the buyer beware.

Surveys cost $600 - $1,000. Updates of older surveys may be cheaper.

Many buyers today are saving the cost of a survey and buying title insurance. This can have a net cost of $27 to $188. The title insurance is supposed to remedy any defect that is later disclosed and was not shown on a survey.

REMEMBER: You save the cost of a survey with title insurance, but you do not have the benefit of a survey!

WARRANTY

There is no warranty on a used home. The legal phrase is Caveat Emptor - Let the buyer beware. However, the buyer is entitled to a house in the same condition as it was when he or she signed the Offer to Purchase. If the seller knows of any defects which are not obvious and apparent, he must disclose these to the buyer before the Offer to Purchase is signed. Otherwise the seller may have to repair the defect at his expense.

INSPECTION BEFORE CLOSING

Most Offers to Purchase give you the right to inspect the house before closing to ensure it is in the same condition it was at the time the Offer was signed.

Make arrangements through the real estate agent or directly with the vendor.

This is also an excellent time to have the vendor show and explain the peculiarities of the house - fuses and circuit breakers, water heater settings, etc.

FIXTURES

Fixtures are anything which is "affixed" or fastened to the property with the intention that it should be part of the property. The seller must leave these in place and in the same condition as they were when the Offer was signed.

Typical fixtures which must be left with the house are:tv antenna air conditionersatellite dish satellite receiverlight fixtures light bulbsexhaust fans storm windows, screenstrees and shrubs flowers and vegetablescurtain rods blind holderscentral vacuum garage door openerbuilt in appliances built in cupboards

The blinds and curtains are not usually fixtures. Refrigerators, stoves and other appliances which are not built in are not included unless specifically mentioned in the Offer to Purchase.

HYDRO and GAS

The lawyers for the buyer and seller will have arranged for meter readings on the closing date. Both utilities like you to call and confirm the closing and to give information to open your new account. Call at:

Arrange new home insurance with your agent as soon as possible. The bank will require that the insurance be for the full insurable value of the house.

Please advise the agent we are acting for you. Call and advise our office of the name of the agent so that we can confirm the coverage.

ADJUSTMENTS

The Offer to Purchase requires an adjustment to be made for taxes, fuel oil and other prepaid expenses to prorate these between the buyer and seller. If the seller paid the year's taxes, he will be entitled to reimbursement for the part of the year the house is owned by the Purchaser. Partial payments and arrears are adjusted accordingly.

For fuel oil, a tank of oil may be worth several hundred dollars. In the summer you can leave it empty and make no adjustment; the rest of the year it is customary to fill the tank and collect from the purchaser the price of a full tank. The seller then pays the cost of the fill up.

CLOSING COSTS AND LEGAL FEES

For your convenience our website now offers a Home Buyer and Home Seller calculator for quick calculation of costs you can expect to pay in a real estate transaction. Please use the links in the left hand menu for a quick and accurate quote.

For commercial properties or if you have any questions about your fee quote please call our office at 647-4010 for a more precise quote - we will fax or email you a written quote.

POSSESSION, MOVING AND KEYS

The time when the purchaser may move in on the closing day has never been satisfactorily resolved in law. One judge actually said it was not until after midnight!

Usually the parties discuss this between themselves and cooperate in moving at convenient times.

Keys are often exchanged between the lawyers on closing.

Ramsay Law Office tries to complete closings in the morning of closing day and to have the keys available in the early afternoon, when possible.

Please leave a telephone number with our office so we can contact you if problems arise.

RURAL PROPERTIES

Check the septic system and water supply before signing the Offer, or require the Offer to say that it is conditional on satisfactory septic system and potable water.

It costs $100-700 to check the records for the septic system or to have an inspection. It is not the practice of Ramsay Law Office to make this check or inspection and incur this expense unless you have some concerns.

Water quality test kits can be obtained from the local health unit and submitted on Tuesdays. Leave up to a week to get the results. Your mortgagee will likely require a water test.

MORTGAGES

The loan the bank gives you to buy the house is called a mortgage or charge. It is the lender's security in the event you do not pay back the loan.

Make application to your lender as soon as possible. Do not waive a financing condition in the Offer until the mortgage has been approved by the lender.

Most lenders do not send the mortgage instructions to your lawyer until a few days before closing. Occasionally this causes inconvenience because you cannot sign all the purchase and mortgage papers when convenient to you.

TENANTS

Tenants are protected by the Residential Tenancies Act and must be given sufficient notice in accordance with that Act to vacate a house that is being sold.

If you are a tenant, you must give your landlord the proper notice or you may be liable for rent after you have left. If you have a written lease, check it carefully for the cancellation privileges.

Further information can be obtained from the Landlord and Tenant Board at www.ltb.gov.on.ca.

GOODS AND SERVICES TAX

Used residential properties and some vacant properties are not subject to GST. Legal fees, real estate commissions and some expenses are taxable. We will advise you of these.

New residential properties are subject to GST at a reduced rate. The builder may credit you with the rebate, or may require you to pay the 5% and claim the rebate yourself. You should have this set out in the Offer.

CONFLICT OF INTEREST

If the Buyer and Seller, and often the mortgagee, hire the same lawyer and difficulties arise between the parties, there is a conflict of interest. In that case Ramsay Law Office cannot act for one client to sue or pursue a claim against the other.

Information from one client cannot be confidential from the other client when the lawyer is acting for both.

If a conflict of interest arises and cannot be resolved, Ramsay Law Office arranges for independent lawyers for all parties.